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A long-established Waihi Beach family is fighting a rear-guard action to secure compensation for the loss of property needed to build a $2.5 million drain to combat erosion.

The Fell Family Trust has bucked the trend in which 33 of 35 property owners have agreed to forfeit their rights to ownership of Two Mile Creek and some adjoining land so that the council could build a 7m wide U-shaped concrete drain.

Shane Fell, whose father Lorne was the town's first policeman and Coastguard president, has taken part in years of negotiations needed to allow the Western Bay District Council to lodge a resource consent application with the regional council.

Mr Fell said that turning the creek into a stormwater drain should have been dealt with by creating easements to accommodate construction because the erosion was linked to discharges from upstream development approved by the council.

"We are digging our heels in - I don't like being pushed around," he said.

The trust supported the council's plan to control erosion which had come within 1.5m of two houses on the other side of the creek from the trust's properties in the Wilson Rd retail area.

But unlike residents who had largely signed away their rights to compensation, the Fell Family Trust wanted the council to lease the land which now mostly comprised their portion of the creek bed.

"We are potentially losing the most land."

The trust was also motivated by wanting to stop the council becoming the landowner along the rear of its two Wilson Rd properties. He said the council already owned the off-street carpark on the western side of its land that comprised shops and an apartment building.

Mr Fell highlighted the changes that had occurred with development since the days when the creek was so shallow people could wade through in gumboots. It included a big development on the former Wilson Farm.

However, the council argued that the upstream development had a large pond that stored water during a storm and then released it in a controlled way so that runoff was no greater than if the land had still been paddocks.

Council chief executive Miriam Taris partly blamed the erosion on the wetting and drying of the banks due to water levels backing up from the natural damming of the creek where it emerged on to the beach. Resource consent conditions dictated how often the council could clear the outlet.

Storm surges and the energy created by wave run up had helped accelerate erosion. The other big contributor was the 500ha of mainly rural land that drained into Two Mile Creek. Ms Taris said the volume and velocity of storms had increased in the past 5-10 years, with run off increasing with changes in the rural landscape.

She said construction of the concrete U-channel could start without the agreement of the family trust, subject to obtaining consent from the regional council.

Quizzed on whether the council was prepared to negotiate a solution, Ms Taris said: "We have been trying to find a resolution for the past three to four years."

The council was not proposing to compensate for lost land but to reduce the cost of the project by owners vesting the land with the council, she said.

Narrowing the concrete channel from 10m to 7m meant construction would mostly take place within the existing creek bed. Ms Taris said that in the majority of cases, including the Fell Family Trust, the land required was less than what had been eroded and in some cases would result in properties having land reinstated that was previously in the creek.

Beneficiaries of the protection works were not required to pay any more than their normal contribution to the council's stormwater fund. "In recognition of the benefit they would receive, it is a requirement that they gift any land required for works to council."

Ms Taris said the trust would actually benefit by the reinstatement of previously eroded land.

A storm three years ago washed away 3m of bank opposite the Fell Family Trust properties, leaving only 1.5m before the house was at risk. The council used emergency powers to install a temporary rock structure to protect the property.

Mr Fell said the addition of the rock wall had seen water bounce off and erode the bank on their side of the creek.

He said the council could not start construction until it had settled with all property owners. Otherwise a gap in the drain could increase damage to their land.

History of Two Mile Creek:

- Began as a metre-wide farm drain in the 1930s- Followed existing ground contours to the beach- Significantly changed by development including properties beside the creek